Employment & Noncompete Agreements

Many employers ask new employees to sign a noncompete clause as part of the employment agreement. Other times, employees are asked to sign such an agreement after they have been working for a period of time. No matter when an employee is asked to sign the agreement, it is generally when employees may not pay much attention to what they are signing. They are looking forward to or enjoying their employment. They are not planning ahead for what will happen if and when they are fired or decide to look for different employment.

It is generally only when they leave that employees learn the ramifications of an agreement they signed weeks, months or even years earlier. If you signed such an agreement and are now being prevented from getting another job in the same field or from starting your own business, you need to consult an employment attorney who can advise you on what your remedies are.

What is a noncompete agreement?

A noncompete agreement typically prevents an employee who leaves the employer’s business from working in another business of the same kind for a period of time after the employment is terminated. It is generally limited by geographical area, such as within a certain number of miles from the existing business.

Are they ways to invalidate a noncompete agreement?

There are several grounds upon which a noncompete agreement may be invalidated. Some challenges that are often successful include:

  • Proving to the court that the agreement severely limits your ability to earn a living.
  • The restriction lasts far too long. Some are for a few weeks. Some for a year and some are forever. If the noncompete agreement is considered valid on all other points, it may still be too restrictive in the length of time it requires you not to compete.
  • The only reason for the agreement is so that you will not be a competitor. On the other hand, if the agreement is to prevent you from using trade secrets or using a protected customer list, that portion of the agreement will likely be upheld.

In order to be enforceable, you must receive some benefit for agreeing to the terms. For example, if you are a new hire, you are given a job in exchange for your agreement. If you have been employed for a period of time and then asked to sign the agreement, you must receive something in exchange for your agreement, such as a raise, increase in benefits or change in employment status. A Pennsylvania court recently determined that a noncompete agreement was unenforceable when the employee, who had been employed for a period of time, gained nothing from signing it.

The Pollins Law Firm can help

Attorney Scott M. Pollins, a Philadelphia area employment & noncompete agreements lawyer, has more than 15 years of experience helping workers who have not been treated fairly by their employers. The laws applicable to noncompete agreements vary by state, so it is important that you consult with an employment attorney who is experienced and knows the laws of Pennsylvania.